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South Korea Producer Prices Rise 6.9% in April on Surge in Petroleum Prices

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South Korea Producer Prices Rise 6.9% in April on Surge in Petroleum Prices

South Korean producer prices jumped in April to their highest yearly level since October 2022 on a surge in coal and petroleum products stemming from the crisis in the Middle East.

Producer prices rose 6.9% during the month, up from a rise of 4.1% in March, according to preliminary data from the Bank of Korea released Thursday.

The reading is also the eighth straight month of increase, Yonhap News Agency reported separately the same day.

Coal and petroleum producer prices surged 73.9% year-over-year during the month.

The figure comes as the country remains vulnerable to the ongoing conflict in the Middle East as it is heavily reliant on crude oil imports from the region, according to a Fitch Ratings report released May 15.

Chemical producer prices grew 15.6% year over year, faster than the 7.7% rise in the preceding month.

Producer prices in the manufacturing sector jumped 11.3% year over year in April, higher than the 6.1% rise in March.

Transportation producer prices inched up 3.2% in April, faster than the 1.7% increase recorded in March.

Agricultural, forestry, and marine products saw a 1% growth during the period compared with a marginal 0.5% rise in the preceding month.

Producer prices in the service sector increased 1.8%, led by a 26.2% growth in financial and insurance activities prices, the BoK said.

On a monthly basis, producer prices grew 2.5%, led by a 4.4% jump in manufacturing producer prices and a 31.9% rise in coal and petroleum producer prices.

The producer price index is among the indicators the central bank is closely watching, as they indicate future inflation trends and influence prices businesses charge consumers, Yonhap said.

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